Popcorn Crops Feel Midwest Drought Squeeze

by Christopher Freeburn | September 5, 2012 12:40 pm

Popcorn Crops Feel Midwest Drought Squeeze

Fallout from the lingering drought in the Midwest could include more than just higher food prices, it could lead to dwindling supplies of popcorn[1].

As farmers watch their crops wither in the heat, grocery store chains and food companies are scrambling to find supplies to keep shelves stocked, Reuters notes.

Retail prices for a 50-pound bag of popcorn have jumped to around $30, up more than 30% from $20 last year.

Those soaring prices have prompted buyers to look as far afield as South America for new popcorn supplies. The added expense will likely be passed along to consumers in the grocery aisle.

But maybe not at the movie theater. Analysts note that prices for food items at movie theater concessions are already stratospheric, considering the wholesale cost of the products, making it unlikely that theater owners will want to raise them further.

Consumer complaints over movie theater prices have become a standard gripe. Theater chains may think twice before giving moviegoers more reasons to complain — or worse, stay home with their ever-larger flat screen TVs.

Shares of movie theater chains appeared unaffected by fears of a reduced corn harvest this year. Cinemark Holdings (NYSE:CNK[2]), Regal Entertainment Group (NYSE:RGC[3]) and Carmike Cinemas (NASDAQ:CKEC[4]) all rose fractionally in Wednesday mid-day trading.

Endnotes:
  1. dwindling supplies of popcorn: http://in.reuters.com/article/2012/09/04/usa-drought-popcorn-idINL2E8JVM3X20120904
  2. CNK: http://studio-5.financialcontent.com/investplace/quote?Symbol=CNK
  3. RGC: http://studio-5.financialcontent.com/investplace/quote?Symbol=RGC
  4. CKEC: http://studio-5.financialcontent.com/investplace/quote?Symbol=CKEC

Source URL: http://investorplace.com/2012/09/popcorn-crops-feel-midwest-drought-squeeze/
Short URL: http://invstplc.com/1nvAuhN